The wine industry in China is only really in its infancy, and as I wrote in an article earlier this week ” Ignore the chinese wine market at your peril: How china can save the Australian wine industry” ( http://wp.me/pS6DN-1z ), the chinese market is a potential saviour for wine industries in countries such as Australia. This is however no simple exercise, and there are many challenges. Then primary challenge is that there is not the same wine drinking culture in China as there is in wine markets such as Europe, North and South America and Australia. The drinking culture in China is more about consuming your drink in toasts, or “ganbei’s” see my previous article on Chinese drinking protocols “Gan bei: Business and ritualistic drinking in China” (http://wp.me/pS6DN-12 ). This is very different from the comparatively considered method of wine drinking that exists in these other wine markets. Most wine consumers in Europe, North America and Australia wouldn’t dream of “shooting” glasses of wine. This poses a challenge for wine companies wanting to export their wines into the emerging Chinese wine market. It does not pose a significant roadblock to success however, and just means that China will need to be looked at in a different light to the traditional wine markets around the world.

There are a number of reasons for the emergence of China as a potential wine market for wineries around the world, obviously the size of the population is important, but it is the growth in the middle class that is the most appealing to wine companies and distributors. The thinking generally goes that as more people enter the middle class, the more people exist who can afford to drink wine. As I mentioned earlier however, this is not part and parcel of the drinking culture in China, and so the consumer needs to be activated to consider wine as a viable alternative to beer, whisky, cognac or traditional Chinese spirits at the dinner/banquet table. And this is where the Chinese government becomes important. Wine is lower in alcohol concentration than spirits, and so has advantages for public health if consumers turn to wine instead of the traditional spirits like Mao-tai.

Any trip to the hyper-market in China whether it Carrefour or Tesco will find you standing in a wine aisle full of French, Italian, South American , Australian and home-grown Chinese wine. The other thing you will notice is that the bottles of wine are generally covered in dust. Why would this be the case? Well this is the standard approach that global wine companies take when entering new markets – get them into the supermarkets. Well the only people who are buying these wines off the shelf are expats working in China, or Chinese citizens who have lived abroad. Definitely not the mainstream, and probably a waste of money for the wine company who may be paying the supermarket chain for shelf space. So who drinks this wine in China? Well at the moment, somewhere around 70% of all wine sold in China is sold to Chinese Government and Chinese Communist Party buyers….wow! I bet you weren’t expecting that! It’s not that they are hoarding wine, but instead they are stocking up on drinks for the banquets that are necessarily held as part of doing business and government work in China. If you are hosting a banquet then you will need to provide the wine, and the government and the CCP host the most banquets and parties.

So what does this mean for wine companies looking to enter the Chinese market? It means that to get access to the current wine market, it is necessary to meet and greet with wine distributors in China with the connections and existing contracts with the government and party. It also means that to take advantage of the next generation of Chinese Wine drinkers, it will be important to help educate the Chinese how and why they should drink wine. Ultimately China is a unique market regardless of the industry, and for those in the wine industry looking to take advantage of the future opportunities as they emerge it will require a marketing and strategic approach that is unique and customised perfectly for China.